Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE      SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 1996

                                       OR

( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE   SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

For Quarter Ended December 31, 1996


                              TRANSNET CORPORATION
             (Exact name of registrant as specified in its charter)

        DELAWARE________________          ______________22-1892295_________
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey               08876-3576_
(Address of principal executive offices)            (Zip Code)

Registrant's Telephone Number, Including Area Code:   908-253-0500

----------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

    Yes  X        No ______

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 5, 1997:  5,216,804.


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                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                        Page No.


PART I.  FINANCIAL INFORMATION

      Consolidated Balance Sheets
            December 31, 1996 and June 30, 1996                       1


      Consolidated Statements of Operations
            Three Months Ended December 31, 1996 and 1995             2
            Six Months Ended December 31, 1996 and 1995               3


      Consolidated Statements of Cash Flows
            Six Months Ended December 31, 1996 and 1995           4 - 5


      Notes to Consolidated Financial Statements                  6 - 7


      Management's Discussion and Analysis                        8 - 9



PART II.  OTHER INFORMATION                                          10












                                       i.


<PAGE>


                      TRANSNET CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                                     ASSETS
                                               December 31,         June 30,
                                                  1 9 9 6            1 9 9 6
CURRENT ASSETS:
   Cash and Cash Equivalents                $   2,101,280       $   2,383,741
   Accounts Receivable - Net                    9,254,180           7,366,019
   Inventories                                  3,325,421           3,642,228
   Deferred Tax Asset                             314,750             314,750
   Other Current Assets                           154,999             465,943
                                            -------------        ------------

   TOTAL CURRENT ASSETS                     $  15,150,630       $  14,172,681
   --------------------                     -------------       -------------

PROPERTY AND EQUIPMENT - NET                $   1,025,714       $   1,158,083
----------------------------                -------------       -------------

OTHER ASSETS                                $   1,070,719       $   1,051,261
                                            -------------       -------------

   TOTAL ASSETS                             $  17,247,063       $  16,382,025
   ------------                             =============       =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable                         $   1,706,097       $   1,739,706
   Accrued Expenses                               469,447             539,104
   Floor Plan Payable                           3,298,476           2,852,328
   Deferred Income                                153,647             319,284
   Other Current Liabilities                      266,283             215,501
                                            -------------      --------------

   TOTAL CURRENT LIABILITIES                $   5,893,950       $   5,665,923
   -------------------------                -------------       -------------

   DEFERRED TAX LIABILITY                   $      48,750       $      48,750
   ----------------------                   -------------       -------------

STOCKHOLDERS' EQUITY:
   Capital Stock - Common $.01 Par Value,
   Authorized 15,000,000 Shares;
   Issued 7,469,524 Shares
   (of which 2,252,720 are in Treasury)     $      74,695       $      74,695

   Paid-In Capital                             10,686,745          10,686,745
   Retained Earnings                            6,760,566           6,123,555
                                            -------------      --------------

   Totals                                   $  17,522,006       $  16,884,995
   Less:  Treasury Stock - At Cost             (6,217,643)         (6,217,643)
                                            --------------      --------------

   TOTAL STOCKHOLDERS' EQUITY               $  11,304,363       $  10,667,352
   --------------------------               -------------       -------------

TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                   $  17,247,063       $  16,382,025
                                            =============       =============
See Notes to Consolidated Financial Statements.
                                          1


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                      TRANSNET CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


                                               THREE MONTHS ENDED DECEMBER 31,
                                                   1 9 9 6           1 9 9 5


REVENUE                                      $   19,496,903     $  17,454,435
-------

COST OF REVENUE                                  17,415,384        15,582,064
                                             --------------     -------------
   GROSS PROFIT                              $    2,081,519     $   1,872,371
   ------------                              --------------     -------------


SELLING, GENERAL AND
   ADMINISTRATIVE EXPENSES                   $    1,728,848     $   1,545,151
   -----------------------                   --------------     -------------

OPERATING INCOME                             $      352,671     $     327,220
-----------------                            --------------     -------------

OTHER INCOME (EXPENSE)
   Interest Income                           $       17,740     $      13,657
   Interest Expense                                 (30,681)          (50,896)
                                             --------------     -------------

   TOTAL OTHER INCOME (EXPENSE) - NET        $      (12,941)    $     (37,239)
   ----------------------------------        --------------     -------------

INCOME BEFORE PROVISION
   FOR INCOME TAXES                          $      339,730     $     289,981
   ----------------

PROVISION FOR INCOME TAX                                  0                 0
                                             --------------     -------------

NET  INCOME                                  $      339,730     $     289,981
------------                                 ==============     =============

INCOME PER COMMON SHARE                      $         0.07     $        0.06
-----------------------                      ==============     =============

See Notes to Consolidated Financial Statements.





                                          2


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                       TRANSNET CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


                                                SIX MONTHS ENDED DECEMBER 31,
                                                   1 9 9 6           1 9 9 5


REVENUE                                      $   36,036,011     $  33,184,402
-------

COST OF REVENUE                                  32,112,304         29,595,286

   GROSS PROFIT                              $    3,923,707     $    3,589,116
   ------------                              --------------     --------------

SELLING, GENERAL AND
   ADMINISTRATIVE EXPENSES                   $    3,296,485     $   2,982,669
   -----------------------                   --------------     -------------

OPERATING INCOME                             $      627,222     $     606,447
-----------------                            --------------     -------------

OTHER INCOME (EXPENSE)
   Interest Income                           $       45,772     $      31,583
   Interest Expense                                 (35,983)         (111,933)
                                             --------------     -------------

   TOTAL OTHER INCOME (EXPENSE) - NET        $        9,789     $     (80,350)
   ----------------------------------        --------------     --------------

INCOME BEFORE PROVISION
   FOR INCOME TAXES                          $      637,011     $     526,097
   ----------------

PROVISION FOR INCOME TAX                      _____________0     ____________
 NET INCOME                                  $      637,011     $     526,097
------------                                 ==============     =============

INCOME PER COMMON SHARE                      $          0.12    $        0.10
-----------------------                      ===============    =============

See Notes to Consolidated Financial Statements.






                                          3

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                       TRANSNET CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)


                                              SIX MONTHS ENDED DECEMBER 31,
                                                   1 9 9 6         1 9 9 5


OPERATING ACTIVITIES:
     Net Income                                 $   637,011     $   526,097
                                                -----------     -----------
     Adjustments to Reconcile Net Income
          to Net Cash:
     Depreciation and Amortization              $   177,606     $    73,512

Changes in Assets and Liabilities:
     (Increase) Decrease in:
     Accounts Receivable                         (1,888,161)     (1,243,755)
     Inventory                                      316,807       1,184,387
     Other Current Assets                           310,944          (9,701)
     Other Assets                                   (43,458)         (1,169)

Increase (Decrease) in:
     Accounts Payable and Accrued Expenses         (103,266)     (2,219,182)
     Deferred Income                               (165,637)       (201,617)
     Other Current Liabilities                       50,782         (69,738)
                                                -----------     ------------

Total Adjustments                               $(1,344,383)    $(2,487,263)
                                                ------------    ------------

NET CASH - OPERATING ACTIVITIES - FORWARD       $  (707,372)    $(1,961,166)
-----------------------------------------       ------------    ------------


INVESTING ACTIVITIES:
     Capital Expenditures                       $__   (21,237)  $_____---
                                                 -------------   --------

NET CASH - INVESTING ACTIVITIES - FORWARD       $_ __(21,237)   $_____---
-----------------------------------------       -------------    --------

See Notes to Consolidated Financial Statements.





                                          4


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                       TRANSNET CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)



                                                SIX MONTHS ENDED DECEMBER 31,
                                                   1 9 9 6          1 9 9 5

NET CASH - OPERATING ACTIVITIES -
     Forwarded                                  $  (707,372)    $(1,961,166)
     ---------                                  ------------    ------------


NET CASH - INVESTING ACTIVITIES -
     Forwarded                                  $___(21,237)    $____---___
     ---------                                  -   --------    -    ------

FINANCING ACTIVITIES
     Floor Plan Payable                         $    446,148    $ 2,219,648
     ------------------                          -----------     ----------

NET CASH - FINANCING ACTIVITIES                 $   446,148     $ 2,219,648
-------------------------------                  ----------      ----------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                           $  (282,461)    $   258,482
     ----------------                           ------------    -----------


CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIODS                       $ 2,383,741     $ 1,549,206
     --------------------                       -----------     -----------


CASH AND CASH EQUIVALENTS AT
     END OF PERIODS                             $ 2,101,280     $ 1,807,688
     --------------                             -----------     -----------

See Notes to Consolidated Financial Statements.








                                          5


<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             (Information as of December 31, 1996 and 1995 is unaudited)


(1.) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Consolidation:  The consolidated  financial  statements  include the
     accounts of the   Corporation   and   its   wholly-owned   subsidiary:
     Century   American Corporation.  Intercompany  transactions  and accounts
     have been  eliminated in consolidation.  During the prior year the 
     Corporation  liquidated four inactive subsidiaries whose activities were
     previously merged with the Corporation.

     Inventory:  Inventory  consists of finished goods. The  Corporation's 
     inventory is  valued  at the  lower of cost  (determined  on the  average
     cost  basis) or market.

     Cash and Cash Equivalents: For the purposes of the statement of cash flows,
     the Corporation considers highly liquid debt instruments,  purchased with a
     maturity of three months or less, to be cash equivalents.

     Earnings  Per  Share:  Earnings  per  common  share are based on  5,216,804
     weighted  shares  outstanding  for the periods ended  December 31, 1996 and
     1995, respectively.


(2.)  INCOME TAXES

     Effective  July 1,  1993,  the  Corporation  adopted  Financial  Accounting
     Standards Statement No. 109, Accounting for Income Taxes ("FAS 109"). Under
     FAS 109,  deferred  tax  assets and  liabilities  are  determined  based on
     differences  between  financial  reporting  and tax  bases  of  assets  and
     liabilities,  and are  measured  using the  enacted tax rates and laws that
     will be in effect when the differences are expected to reverse. Adoption of
     FAS 109 had no material  effect on the Financial  Statements.  Prior to the
     adoption of FAS 109, income tax expense was reported  pursuant to Financial
     Accounting Standards Statement No. 96.

     The Corporation has a deferred tax asset of $865,000 based on net operating
     loss carryforwards of approximately  $1,400,000.  A valuation  allowance of
     $550,250 has been provided against this deferred asset.  Realization of the
     tax asset is dependent upon future events effecting  utilization of the net
     operating loss carryforwards ("NOL's").  NOL's expire in the years 2005 and
     2006.

     Current tax expense of $254,800 has been offset by the net  operating  loss
     carryforward  benefit of $254,800  for the six months  ended  December  31,
     1996.  Tax expense and  carryforward  benefit  amounted to $137,600 for the
     three month period ended December 31, 1996.
                                          6


<PAGE>





(3.) RECLASSIFICATION

     Certain  items from prior year's  Balance Sheet and Statement of Operations
     have been reclassified to conform to the current year's presentation.



In the opinion of management,  the accompanying unaudited consolidated financial
statements   contain  all  adjustments   consisting  only  of  normal  recurring
adjustments  necessary to present fairly the financial position,  the results of
operations and cash flows for the periods presented.

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 1996.




























                                          7




<PAGE>




                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations
Revenues  for the three  months  ended  December  31, 1996 were  $19,496,903  as
compared  with  $17,454,435  for the quarter  ended  December 31, 1995.  For the
quarter ended December 31, 1996 the Corporation  reported net income of $339,730
as compared with net income of $289,981 for the similar  period in 1995. For the
six months ended December 31, 1996,  revenues were  $36,036,011,  as compared to
$33,184,402  reported for the similar period in 1995,  with earnings of $637,011
for the period ended  December 31, 1996,  compared with net earnings of $526,097
for the same  period in 1995.  The  increase in  revenues  is  primarily  due to
increases in the sale of the Corporation's technical services (such as technical
support, technical repair and maintenance services, system integrations, network
design and installation,  and training),  and to a lesser extent to an increased
volumes of hardware sales. The portion of increased  revenues  attributed to the
increase in equipment sales was lessened from prior periods due to the impact of
decreases in the prices of computer equipment.

Earnings for the quarter ended December 31, 1996 are  attributable  to increased
service  revenues,  management's  concentration  on sales of network  and system
integration  products  which yield  higher  profit  margins,  the  Corporation's
technical service and support programs,  and continued adherence to cost control
measures.  Service  related  revenues,  though  not a  material  source  of  the
Corporation's  revenues,  are  significant  in their  contributions  to earnings
because these  operations yield a higher profit margin than equipment sales. The
Corporation  agressively increased its technical staff in response to the demand
for its services, encountering the high level of competition in the industry and
the shortage of qualified technical personnel.  Management  anticipates that the
technical  service  segments of its  operations  will  continue to expand in the
future,  and that the  competition to hire and retain  qualified  personnel will
similarly  continue.  For the quarter ended  December 31, 1996,  the increase in
revenues  from the  provision  of  service,  support,  outsourcing  and  network
integration is largely the result of the  Corporation  renewing  and/or entering
into service contracts with a number of large corporate customers.  The majority
of these  contracts are  short-term,  usually twelve months or less, and contain
provisions  which permit early  termination.  Although the  contracts  generally
contain renewal terms, there is no assurance that such renewals will occur.

The computer industry continually faces manufacturers' reductions in prices on a
wide array of products.  These price reductions increase  competition,  creating
pressure to lower prices to customers in order to remain  competitive,  which in
turn results in the reduction of profit margins.  To maximize the  Corporation's
profit  margin,  management  has modified its marketing  strategy,  has enforced
expense controls,  and continually considers additional cost reduction measures,
such as outsourcing such items as distribution activities.  Management's current
marketing strategy is designed to increase sales of lower revenue/higher  profit
margin products related to service and support operations.  Management's efforts
include targeting

                                          8


<PAGE>


commercial customers,  and to a lesser extent educational customers, who provide
marketplaces  for a  wide  range  of  products  and  services  at  one  time,  a
cost-effective  approach  to sales.  Management  believes it  maximizes  profits
through  concentration  on sales of value-added  applications;  promotion of the
Corporation's   service  and  support   operations;   and  strict  adherence  to
cost-cutting  controls.  Management  emphasizes  the  promotion of its technical
service,  support,   outsourcing  and  network  integration  capabilities,   and
continues the aggressive  pursuit of an increased  volume of equipment sales and
promotion of its training services.

Interest  income for the quarter  increased  as  compared  to the  corresponding
period  in the  prior  year  because  of the  increase  in the  amount  of funds
invested.  Interest expense  decreased in the quarter and six-month period ended
December  31,  1996  compared  to the  same  periods  in 1995,  as a  result  of
management's  efforts to shorten the collection  cycles of accounts  receivable,
with a resulting reduction in related financing costs.

Although  actual expenses  increased in 1996 due to the expenses  related to the
significant  increase in the  Corporation's  technical staff (discussed  above),
selling,  general and administrative  expenses remained  relatively  constant at
approximately  9% of revenues for the quarter and six-months  ended December 31,
1996 and 1995, due to management's strict adherence to cost-control measures.

Liquidity and Capital Resources
There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under  which  such  inventory  secures  the  amount   outstanding.
Inventory  decreased in the quarter and six-month period ended December 31, 1996
as  compared  to the  corresponding  period  in 1995 in  response  to  increased
inventory turns related to the higher volume of sales. Management shall continue
its efforts to increase  turnover and to provide the Corporation with protection
against inventory  obsolescence  resulting from the rapid technological advances
of the computer industry, as well as minimize floor plan financing.

Accounts  receivable and payable  increased for the quarter and six-month period
ended  December 31, 1996  compared  with the same periods in 1995 as a result of
increased  sales.  Cash levels  decreased in the six month period ended December
31, 1996 as compared to the corresponding period in 1995. The decrease is due to
scheduled payment requirements under the floor planning arrangements

For the fiscal quarter and six months ended December 31, 1996, as in the periods
ended  December  31,  1995  the  internal  resources  of  the  Corporation  were
sufficient to enable the Corporation to meet its obligations.



                                          9



<PAGE>




                                    PART II.

                                OTHER INFORMATION


Item 6:  Exhibits and Reports on Form 8-K

            A.  Exhibits - None required to be filed for Part II of this report.

            B.  Reports on Form 8-K - None filed during the quarter for which 
                this report is submitted.



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                    TRANSNET CORPORATION
                                    (Registrant)




                                    /s/ Steven J. Wilk __________________
                                    Steven J. Wilk, President



                                    /s/ John J. Wilk ____________________
                                    John J. Wilk,
                                    Principal Financial and Accounting Officer
                                    and Chairman of the Board of Directors




DATE:  February 11, 1997
                                         10


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